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Comment by epicureanideal | Hacker News Reader

> the complexity that each individual company/employee needs to handle has increased

Also regulation has massively increased. There are tons of laws you might accidentally break as an early startup without even knowing it, and there are tons of laws that restrict entry into the marketplace through a high legal compliance burden.

Imagine trying to create Facebook today. With 3 employees and a few hundred users, what's your anti-CSAM strategy? What are the laws about who is responsible if some ends up on your platform, and how you need to handle it? Ask your $500 per hour lawyer. I'll wait.

Imagine trying to create Paypal today. Oh, wait, you need something like a million or more dollars to even operate.

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>Imagine trying to create Facebook today. With 3 employees and a few hundred users, what's your anti-CSAM strategy?

Two options: launch on unregulated market first or just ignore* compliance until risks for customers are high enough.

*do not mention it in written form, just have some paperwork that work is in progress.

> ignore* compliance

And what are the consequences if something goes wrong? Does the executive team go to prison? Usually doesn't happen to the well-connected, but what if you're not well-connected?

Personally, I wish the laws were rational, and scaled according to the size of a business, rather than relying on the whims of prosecutorial discretion.

Random theory: if the law creates many risks even for people who are trying to be moral, risk-averse people will be less likely to start businesses. More businesses will then be started by people who disregard risk, and also selects for a disproportionate number of people with serious psychological issues (although still a small percentage, but higher than the general population). What kind of filter do you have, when people starting certain businesses need to be comfortable rolling the dice on a 1% or 5% chance of going to prison for no intentional reason, and a chance at a pile of cash if that doesn't happen? It sounds like it selects for the same psychology as criminals.

> launch on unregulated market first

There are fewer and fewer of those all the time, and the ones that remain are in smaller and smaller, less profitable niches. So that technically opportunities exist, but as a practical matter fewer and fewer people are able to ascend the success ladder.

> And what are the consequences if something goes wrong?

If some rule is broken it is not a big deal if there is no harm to anyone. Nobody is 100% compliant with all regulations, but the companies which approach this matter pragmatically, following the spirit rather than the letter of the law, usually do not have problems. E.g. if you are health-tech startup, you must avoid any health-related risks and prevent data leaks, but you may not serve GDPR requests perfectly. At worst regulator will warn you and then you will invest your resources in fixing the issue. And preventing data leaks is also easier for an obscure early stage startup: you simply get less attention from malicious actors and will likely encounter automated attacks rather than being specifically targeted.

> At worst regulator will warn you and then you will invest your resources in fixing the issue.

But there's no guarantee of this right? According to the law, if they wanted to destroy your company over some tiny accidental rule breakage, they could. It just depends on if you're on someone's list or they're having a bad day. Unpredictable application of the law is not great.

Do you have an example?

> I wish the laws were rational, and scaled according to the size of a business

A five-person startup shouldn’t leak my data just because they share passwords and it were not mandatory to have a GDPR person at that size.

I believe we are already in that state. This is why we see such a high occurrence of psychopath and sociopath in CEOs.

Facebook ignored compliance at the time, but the way they mitigated the risks was by targeting a smaller, exclusive market (smaller colleges in the US) that's less risky compliance-wise (no minors for instance, domestic market).

It seems to me like PayPal specifically would be much easier to create today. Financial stuff was heavily regulated back then too but companies you’d need to integrate with would be a lot easier to integrate with today, I think. Also I think the PayPal guys had quite a bit of money to work with?

I’m not trying to nitpick you, I would just like you to point out if my understanding is wrong!

The cycle of ripe innovation to ossified industry is complete

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